What To Include
Remuneration is more than payroll
It is important to identify your remuneration accurately. You need to know what should, or shouldn't, be included as there are penalties for underestimating or understating your remuneration. If you think you may have done this, contact your WorkSafe agent as soon as possible.
Refer to the remuneration checklist to help you identify items to include when you estimate and certify your remuneration.
Some remuneration may not be quite so obvious
Some forms of remuneration paid to workers are not paid directly and are not part of your payroll. These are known as remuneration to third parties and must still be included in your remuneration. See sections on Contractors and remuneration and Remuneration to third parties.
Remuneration can include both cash and non-cash (in-kind) payments. Remuneration must be declared on an accrual basis, that is remuneration paid or payable in respect of a financial year should be declared for that financial year.
Contractors and remuneration
Some payments to contractors who are, or who supply, deemed workers should be counted as rateable remuneration. This includes contractors which are companies.
The term contractor covers a wide variety of people in different work circumstances. A contractor could be a consultant, agent, tradesperson or professional person, or a company providing the services of a person. Contractors may operate as sole proprietors, partnerships, companies or through the various types of trusts.
If you hire any person to perform work on a contract, this person may actually be a worker, or deemed to be a worker, under some contracts. This is in accordance with deeming provisions under sections 8 or 9 of the Accident Compensation Act 1993.
If the contractor you hire is deemed to be a worker, you must include some or all of the money you pay this person in your estimate and certification of rateable remuneration.
Contactor remuneration can be difficult to determine. For more information contact your WorkSafe agent or refer to the Contractors guidelines.
Remuneration to third parties
These remuneration items are part of an employment package, not paid directly to a worker, but which benefit a worker, a member of a worker’s family, or a person, organisation or trust, etc., associated with the worker or worker’s family, defined in the Fringe Benefits Tax legislation. Refer to Fringe benefits amount.
Superannuation and other remuneration components
Many employers pay a significantly higher amount of superannuation as part of the total remuneration package for workers than the statutory superannuation guarantee charge. If employer superannuation contributions were not included in the rateable remuneration some employers would have a lower remuneration base than others merely by remuneration packaging differences.
What if I have workers in Victoria and other states or overseas?
Legislation effective from 1 July 2005 clarifies who is a Victorian worker for the purposes of declaring remuneration for the calculation of insurance premium. For details see page 21 of the booklet Your Workplace Injury Insurance 2006/07. You can also read about the tests used to determine which state a worker is connected to (including information about workers who work on ships) by downloading the following document determining a worker's state of connection.
- download and view "New rules for workers that work interstate or overseas"
- download and view the publication Cross Border Workers' Compensation Provisions
What if I have workers who work on ships? How do I know which state I should declare their remuneration in?
Workers on ships should be treated in the same way as other workers. However, if no State or no one State can be identified by using the state of connection tests (outlined in the document referred to above), a worker's employment is, while on a ship, connected with the State in which the ship is registered or, where the ship is registered in multiple States, the State in which the ship was most recently registered.
What remuneration is exempt?
The following types of remuneration do not need to be declared:
- Some apprentice remuneration is exempt for Workplace Injury Insurance (Apprentice includes trainee remuneration in this context). It is subject to the training being an approved training scheme and to certain qualifications and restrictions.
Remuneration paid to an apprentice or trainee is exempt where:
- the apprentice has not, for two years prior to the start of the training agreement, been employed for more than three months full time for an aggregate of 12 months part time) by:
If apprentices meet these conditions before being engaged under a training agreement, they may be employed under successive training agreements with current and former employer if the time between any two agreements is less than three months.
It is important that you are aware of the restrictions and qualifications that apply. Contact your WorkSafe agent for assistance.
- compensation payments under the Accident Compensation Act 1985 ( e.g.weekly benefit payments )
- dividend paid to a shareholder
- payment by you as host employer to a student of a TAFE provider in an:
- an approved TAFE course; or
- a pupil at school
- for work experience purposes. These arrangements must be made in writing.
- partners’ drawings
- payments to Construction Industry Long Service Leave Board and contributions to the Redundancy Payments Central Fund (as long as they are not taxable under the Fringe Benefits Tax Assessment Act 1986).
- termination payments (e.g. payments in lieu of notice, accrued holiday pay, long service leave or severance pay) made to a worker on cessation of employment. Note: If a person is given notice of termination or gives notice of resignation but works until the termination or resignation takes effect, the payment for this period is not exempt remuneration.
- most exempt benefits under the Fringe Benefits Tax Assessment Act 1986, which include:
- benefits provided to a minister or full-time member of a religious institution
- certain benefits provided in respect of employment of a worker of a public benevolent institution
- Typically employers are members of a group where there is a connection in the way they operate and they have holding/subsidiary relationships or are controlled or owned essentially by the same persons or where the staff of one employer provides services for another.
- An employer is a predecessor if it, in effect, sells or transfers to another employer its business, part of its business, or an asset of its business including goodwill or intellectual property such as a licence.
Further information:
• a quick guide to remuneration - the remuneration checklist.
